In Naturita, uranium bust thumps hard

ByScott ArmstrongFebruary 16, 1982

Naturita, Colo.
— The Yellow Rock Cafe, a local watering hole and nerve center, acts as a weather vane for the uranium industry in these parts.

When the mines are booming, there often aren't enough booths to go around for the coverall-clad patrons. But when the industry slumps, as it is now, there's no shortage of seats at the local haunt, named for the uranium ore in the surrounding hills.

''This has been a wonderful place for a small miner to make a buck,'' says Calvin Sanders, a uranium miner for 25 years, between bites of a Mexican lunch. ''But now there just isn't any work. It isn't a desperate situation yet - but it's going to get that way.''

Exploration for new lodes of the honeyed ore is down. And the production of yellowcake, natural processed uranium, has fallen off a cliff in some parts of the country. The slowdown has put thousands of people out of work throughout the Mountain West, where more than 90 percent of the nation's ore lies.

At last count, 8,000 of the industry's 22,000 workers were idle. Socked hardest have been New Mexico and Wyoming, the country's two kingpin suppliers. But a soup-line gloom has also spread over parts of southwestern Colorado, the birthplace of uranium mining in the United States.

The layoffs underline that Colorado's economy - despite being robust from high-technology and energy-related growth - has a soft side. Some hard-bitten residents, mindful of the boom-bust cycles connected with gold and silver in the past and more recently with uranium, are beginning to ask: Will oil shale be next?

In tiny Naturita, a one-truck-stop town near the Colorado-Utah border, most of the residents' paychecks are tied in one way or another to uranium. The area's dusty, salmon-colored buttes and canyons are laced with cubbyhole-size mines that have produced financial grubstakes for some families for generations.

A few of the idled workers are working on ranches to make ends meet. Others have left the area altogether. Since September 1980, 140 students have been pulled out of the area's main school, leaving only 525 pupils. The number of post office boxes in Naturita (pop. 820) has dropped 30 percent in just over a year.

In nearby Nucla, the sign on the edge of town says simply, ''Welcome to Nucla - home of 1,000 friendly people and one grouch.'' But today, arguably, others may be tempted to be disgruntled as well.

Jose Salazar has been working uranium mines in the area since the 1950s. ''In the 26 years I've lived in the area, this is the only time I've been out of a job,'' he says. ''This is the first time I've seen it like this.''

At the nearby headquarters for the Western Small Miners' Association, situated in an old gas station, Mike Moore, its president, relaxes in a swivel chair. In five months he has cut the number of workers at his uranium mine from eight to four. ''In a few months I may have to let a couple of more go,'' says Mr. Moore.''I've got guys coming up to me and asking if they can work for $5 an hour. Usually they get $8 to $11.''

In neighboring Uravan, Union Carbide Corporation has its uranium processing mill running near capacity. But company officials are unsure about how long it will stay up. Half the mill's 180 people were laid off for six months last year - and many local people expect it to go down again shortly.

The woes facing the uranium industry here and elsewhere are directly tied to the cloudy outlook for nuclear power. Once one of the white knights of the US energy scene, nuclear power has been knocked from its high horse, particularly since the accident at Three Mile Island. No nuclear power plants have been ordered by the nation's utilities since 1978, and orders for dozens of others have been canceled or delayed.

At the same time, utilities that scrambled to tie up uranium supplies in the early and mid-1970s in anticipation of more plants coming on line are wallowing in surplus ore. The result today: a glut of uranium that some experts believe could take most of the 1980s to siphon off. The nation's utilities are currently sitting on a 130-million-pound stockpile of ore - a six-year supply at today's usage rates.

Some power companies, in fact, are trying to sell unwanted supplies from their inventories, going head to head with producers in the marketplace. ''Right now, utilities just aren't buying uranium,'' says William Chenoweth, a uranium expert with the US Department of Energy (DOE) in Grand Junction, Colo. ''And some of those that are, are buying from themselves rather than from Western ore producers.''

With too much yellowcake to go around, few companies are poking around to find more. The DOE estimates that exploration expenditures in 1981 amounted to about $175 million - the lowest since 1976 and barely half the $316 million spent in 1979. And Mr. Chenoweth reckons that less than $100 million will be spent this year.

Some of the big explorers - notably Exxon - are getting out of the hunt for new uranium supplies this year altogether.

Moreover, the production of uranium ''concentrate'' in the US in 1981 was off 15 percent (down to 18,500 tons) from the year before, the DOE estimates, and could dip below 15,000 tons this year - the lowest in seven years.

No quick turnaround seems in sight. The Nuclear Exchange Corporation (Nuexco) , a California-based uranium broker, predicts supplies of uranium will likely continue to outstrip demand throughout the 1980s. George White Jr., a Nuexco senior vice-president, sees the price of yellowcake, now at its lowest point in seven years, rising only modestly during the decade.

But some analysts see the industry perking up again by the mid-1980s. ''My guess is the turnaround will come between 1985 and 1987,'' says Jerome G. Morse, a physics professor at the Colorado School of Mines and an industry consultant. ''I feel this country is going to have to rely on nuclear power even if we have to buy reactors from the French.''

In the meantime, the small communities tucked into this rumpled section of the Rockies will be hanging on by their fingernails. Yet they have bounced back before. Indeed, the area has led a boom-bust existence almost since the first ore was scooped out more than a century ago.

If the crowds do come back, that will be heartwarming for Dan Crane. He owns the Ray Motel across the street from the Yellow Rock Cafe. At one time people had to book reservations a month in advance. No more. ''Two years ago was the biggest year we ever had,'' he says from his snug office. ''It's terrible now. I've seen two or three downers around here, but this is the worst I've ever seen.''